SMM Morning Comments (Jul 13): Shanghai base metals were mostly lower as investors awaited China's trade data for June

SHANGHAI, Jul 13 (SMM) — Shanghai base metals were mostly lower on Tuesday morning as investors awaited the release of China's trade data for June. Meanwhile, their counterparts on the LME also fell for the most part.

Shanghai base metals ended mostly lower in overnight trading. Zinc went down 1.43%, copper fell 0.48%, lead weakened 0.22% and nickel slid 0.04%, while aluminium increased 0.47% and tin rose 1.2%.

The LME complex performed similarly on Monday. Zinc plunged 0.99% to lead the losses, copper fell 0.4%, lead weakened 0.04% and nickel slid 0.43%, while aluminium remained unchanged and tin rose 0.63%.

Copper: Three-month LME copper fell 1.16% to end at $9,409/mt on Monday, and is likely to trade between $9,450-9,540/mt today.

The most-active SHFE 2108 copper contract went down 0.48% to close at 69,110 yuan/mt in overnight trading, and it is expected to move between 69,200-69,800 yuan/mt today.

According to the survey conducted by the Federal Reserve Bank of New York, the median one-year inflation forecast in June rose from 4.0% in May to 4.8%, the highest since the forecast was launched in 2013, and the uncertainty of future inflation results increased in the short term. As soon as the news came out, the strength of the US dollar dragged down the overall decline of metals. The market is waiting for the inflation data of the US this week and the speech of the Federal Reserve Chairman in Congress, looking for clues to reduce the scale of debt purchase. On the spot side, copper stocks in Shanghai decreased 15,000 mt on week. Under the tight market supply, the goods-holders were reluctant to sell the goods, and the premium rose rapidly.

Aluminium: Three-month LME aluminium fell 0.06% to close at $2,492.5/mt on Monday. It is expected to trade between $2,480-2,550/mt today.

The most-liquid SHFE 2108 aluminium contract rose 0.71% to settle at 19,175 yuan/mt on Monday night, and is likely to trade between 19,000-19,500 yuan/mt today.

The global liquidity situation has not changed. On fundamentals, social inventories of aluminium ingots continued to decrease, but the consumption of profiles in construction and other sectors weakened, and the aluminium billet stocks continued to pile up. The overall domestic aluminium spot gave limited boost to aluminium contracts. Domestic aluminium output rose slowly in July, and the support from overall fundamentals on aluminum prices showed a decline. The inflection point of the increasing stocks and the change of long position and short position sentiment will be monitored in the later period.

Zinc: Three-month LME zinc fell 0.99% and closed at $2,948.5/mt on Monday. Zinc stocks at LME-listed warehouses fell 125 mt to 251,075 mt. Overnight, the strength of the US dollar pressured the trend of LME zinc, and the market worried that the overseas pandemic fermentation would affect the global economic recovery, and cautiously looked forward to the US inflation data. The contract is likely to trade between $2,940-2,990/mt today.

The most-liquid SHFE 2108 zinc contract fell 1.43% to end at 22,100 yuan/mt in overnight trading. Overnight, SHFE zinc operated weakly. Although PBOC's RRR cut boosted market sentiment, the pattern of weak fundamentals remained unchanged. Under the influence of the off-season, the consumption of downstream sections showed a downward trend, and SMM social inventories recorded an increase again. The spot market also traded tepidly, and the fundamental support was weak. The SHFE zinc contract is expected to move between 22,000-22,500 yuan/mt today, while spot premiums for domestic 0# Shuangyan will be seen higher at 230-250 yuan/mt.

Nickel: The most-active SHFE 2108 nickel contract fell 0.04% to close at 139,610 yuan/mt on Monday. Recently, there was no clear good or bad news about nickel prices, the market shortage of nickel continued, and the pattern of strong fundamental support remained unchanged. The contract is expected to fluctuate widely between 138,000-141,000 yuan/mt today.

Three-month LME nickel fell 0.43% to close at $18,675/mt on Monday.

Lead: Three-month LME lead fell 0.04% to close at $2,328/mt on Monday. Whether the contract could keep fluctuating at high will be monitored today.

The most-liquid SHFE 2108 lead contract fell 0.28% to settle at 15,850 yuan/mt on Monday night. Domestic lead consumption is still tepid, and the pressure of increasing stocks is still high with few high-priced transactions and moderate spot market delivery. The contract will test support from the five day moving average today.

Tin: Three-month LME tin closed up 0.63% at $31,950/mt on Monday.

The most-liquid SHFE 2108 tin contract rose 1.2% to close at 221,000 yuan/mt on Monday night. Pressure above will be seen from 220,000 yuan/mt today. Support below will be seen from 219,500 yuan/mt today.